Cuts in computer, electronic jobs drive tech sector purge

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Job cuts driven by Americans' shifts toward tablets and cloud computing could only be the beginning of overhauls in the nation's tech sector this year.

A semi-annual report released this week by Chicago-based global workforce firm Challenger, Gray & Christmas found that during the second quarter, which occurred between April and June, the nation's tech companies announced plans to cut 20,491 workers, a 144 percent surge from the previous quarter.

Computer firms, or organizations that manufacture PCs and other desktop computers, led the way with 16,404 cuts announced -- a 365 percent increase from first quarter cuts of 3,526 -- and planned cuts by electronics firms jumped 68 percent from 1,935 in the first quarter to 2,344 in the second quarter. For the purpose of the report, electronics firms are those that create computer component parts, semiconductors or other segments for electronics.

While the figures appear dire, they're actually an improvement from a 2012 second quarter that saw a total of 39,164 jobs lost, including 32,072 computer workers and 977 electronics employees.

PG graphic: 2013 technology job cuts
(Click image for larger version)

In Pennsylvania, 200 of the 228 tech cuts made during this year's second quarter came with the May closing of two AT&T call centers in Pittsburgh. As of May 2012, there were 31,690 people employed in computer and mathematical occupations in Pittsburgh, according to the Bureau of Labor Statistics. That figure does not account for engineering, biotechnology or life sciences jobs.

If personal computer sales or the number of clients using data storage companies to save digital information lags throughout the year, the nation should expect to see even more jobs lost, said Challenger Gray & Christmas CEO John Challenger.

He noted that Hopkinton, Mass.-based data storage provider EMC Corp. announced 1,000 job cuts in May. He also said Armonk, N.Y.-based IBM is expected to cut around 8,000 employees worldwide after first-quarter earnings failed to meet expectations.

"The second half of the year could see even more job cuts in the technology sector as at least one forecaster cut its forecast for global IT spending this year in half due to slowing PC sales," Mr. Challenger said in a news release. "Stamford, Conn.-based research firm Gartner recently recalibrated its spending outlook from an originally reported 4 percent gain to a less optimistic 2 percent."

Fortunately for tech workers, plenty of doors are opening in emerging fields, said Logan Knight, executive recruiter, IT division for Redfish Technology.

Mr. Knight said his Hailey, Idaho-based company, which works largely with Silicon Valley employers, has seen a decline in requests for hardware developers for desktop computers, software developers and for employees with alternative energy expertise.

However, he said the company has also seen consistent requests for tablet and mobile interface developers, software engineers, data analysts, security professionals and other high-tech positions throughout the year.

"The shift away from current technologies toward others making new technologies is making job placements go through the roof almost," Mr. Knight said.

Robert Biederman, co-founder of Cambridge, Mass.-based Hourly Nerd, agreed that the cuts weren't affecting the number of placements his company has made.

He said Hourly Nerd, which links MBA students with small to medium-sized businesses and organizations for hourly work, regularly sees requests for technical talent who can boost sales through digital marketing and sales strategies. Sales, marketing and other fields where software can be used as a service are good ways for someone exiting a career in computers to keep one foot in the tech sector, Mr. Biederman said.

"Somebody who has experience working with clients as part of their technical job, while one job may not be for you, maybe you can find a job helping customers having problems with products or try to working on the marketing side. It's a matter of how you're representing yourself," he said.

Mr. Challenger agreed the year's losses could amount to more of a workforce shuffle than throwing in the towel on thousands of employees.

"If sales of equipment, software and services do slow, expect more companies to react with planned layoffs," he said. "The good news is that these workers' skills are in demand, particularly those experienced in data analytics, cloud computing, systems architecture, information security and software engineering."

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Deborah M. Todd: or 412-263-1652.


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